Flegel's Fine Funriture has long been a fixture in downtown Menlo Park. I think they have done a marvelous job of adapting to the needs and face of the community over the years. Below is an article from the hyper-local Blog, InMenlo, authored by Linda Hubbard Gulker. The photograph is by Chris Gulker, co-creator of InMenlo.

Source: http://www.inmenlo.com/

It’s nearly impossible to visualize downtown Menlo Park without including one of its most enduring fixtures, Flegel’s. That the furniture store has survived 56 years, including a major fire in 1983, is due in large part to the tenaciousness and vision of the Flegel family.

“My father was in the furniture business in San Mateo when he decided to go out on his own,” says Mark Flegel (pictured), who’s been running the business since 1984,
“He looked at different Peninsula communities and settled on Menlo Park. There was lot of construction going on and a lot of young families moving in, so it seemed like it had good potential.

“There were also 13 furniture stores within a five-mile radius! Advisers told him that he’d last only six months, that he was under-capitalized. History, of course, has shown otherwise. Flegel’s is the only one of the 13 left.”

To meet changing needs, Flegel’s has adapted over the years. As the surrounding community prospered, the store elevated the caliber and quality of the furniture lines it offered. It also innovated.

“My father introduced interior designers into the furniture store business,” recalls Mark. “Before that designers and furniture were always separate. He sensed that offering both in the same place is what the community wanted. That turned out to be very true.”

Flegel’s the store and Flegel the family are both such Menlo mainstays there is little that’s not known about them. But here are a couple of nuggets, courtesy of Mark: “Most people don’t know we have clients all over the world. We furnished the Chancellor of Education’s palace in Stockholm, which is located next to the King’s palace.

“There’s also a version of our store in Yokohama thanks to the interest of a Japanese businessman who came in one day. We have no interest in it but I think of it as a kind of branch office!”

Photo by Chris Gulker

The State of the Markets

If someone were to wake up from a 5-year coma and ask about the state of our country’s economy, the chart below pretty much sums it up.

The past five years in the housing market, the financial market and the economy have been anything but boring.

With respect to the housing market, we are at a critical juncture. Pundits and so-called experts are lining up on opposing sides of the recovery debate. Optimists will point out that after historic price declines, affordability is at all-time highs and government support for the housing market has helped mitigate the negative effects of tightened credit and mounting foreclosures. The bottom, they say, is in.

Meanwhile, pessimists urge caution. Foreclosures continue to rise, more borrowers are falling behind and the government is considering removing some of the programs that have kept interest rates low.

Ultimately, both arguments have merit. But they both miss the point.

Take another look at the graph above. It’s no coincidence that during the time of most uncertainty in the stock market (2008), the housing market experienced its steepest declines. It’s also no accident that the recent bottom in stocks (March 2009) matches almost exactly with the turning point in housing.

The answer to the riddle is simple: Confidence.

In a new book called This Time is Different, economists Kenneth Rogoff and Carmen Reinhart dissect hundreds of years of financial crises and try to assess how societies keep getting themselves into the same mess over and over again.

A common thread in the discussion, specifically surrounding debt crises like the one we experienced (and indeed are still experiencing), is the notion that confidence plays a far larger, and far less understood role in economic panics than most people think. According to Rogoff and Reinhart: “Economists do not have a terribly good idea of what kinds of events shift confidence and how to concretely assess confidence vulnerability.”

Since most people equate the stock market with the economy, swoons on Wall Street send the message that all is not well with our economic future. Accumulate enough of these swoons and confidence gets punctured to the point where people start acting differently. As risk aversion grows, consumers delay purchases, businesses delay expansion and banks stop lending.

In March of last year, the housing market was beyond bleak. Liquidity dried up and buyers were terrified. Ditto on Wall Street. But as stocks recovered through the spring, hope emerged that maybe the worst was behind us.

Now, as the recent surge in stocks is tested, so too will the surge in home buying: The two are far more linked than most understand.

This post first appeared in the February edition of: Cirios Trends: In Search of Real Estate Opportunities.

House of the Week

Today on Tour...

This morning I had the privilege of seeing the home where one of my dear friends lived for many years prior to our meeting.

This fabulous contemporary home sits upon a beautiful forested setting in Portola Valley. Here you can entertain in grand style, dine in the tree tops!

The spacious rooms include a dramatic foyer, Family Room, enormous kitchen, Living Room, home office, 4 Bedrooms and more, all on 1.52 acres.

Please call me at (650) 543-1215 for a personal tour of this property.

Are you concerned about what High Speed Rail will look like in our city?

Do you want to see what designs they are considering?

Please join us on Tuesday, February 9th from 3:30 pm - 6:00 pm in Council Chambers at Palo Alto Civic Center (250 Hamilton Avenue) for a preview of the Alternatives Analysis for the High Speed Rail Project.

Representatives from the California High Speed Rail Authority will present a preview of the design alternatives that are being studied for the high speed train that is planned on the CalTrain right of way. We have been told there will be engineers on hand to answer technical questions.

There will be a period for public comment and each speaker will have 2 minutes. This meeting will be video taped and made available on the city's website for those who can't attend.

The Alternatives Analysis will officially be presented to the Board of Directors for the High Speed Rail Authority on March 4th. From that point on, the public will have 30 days to provide any official comments to the alternatives presented. We are hoping that the deadline for comments will be extended - but we are not sure, so please plan ahead.

It is very important that citizens get involved in the process and offer their feedback. If you do not comment, under the law your silence means you agree with the plans put forth 100%.

Please note, if you have comments for the High Speed Rail Authority, you will need to turn those in in writing in order for them to be part of the official record.

If you'd like additional information about this presentation, please contact Steve Emslie, Deputy City Manager at steve.emslie@cityofpaloalto.org or 650-329-2354.

For more information, please see the City's website at: http://www.cityofpaloalto.org/living/news/details.asp?NewsID=1223&TargetID=4

If you have not yet seen the conceptual video that the Authority put out for Palo Alto, please see: http://www.cahighspeedrail.ca.gov/gallery.asp?s=alma-street.

Other sources of information:

Official California High Speed Rail website: http://www.cahighspeedrail.ca.gov/
Peninsula Cities Consortium: http://www.peninsularail.com/
CARRD - Californians Advocating Responsible Rail Design: http://www.calhsr.com/

Hope to see you there!

Nadia Naik
Co-Founder
CARRD
Californians Advocating Responsible Rail Design
nadianaik@carrdnet.org

Rates at a Glance

Source: Mortgage California

30 Year Conf Fixed
4.875% 1 point

5/1 Conforming
3.500% 1 point

30 Yr Agency Jumbo
5.00% 1 point

30 Year FHA
4.750% 1 point

5 Year Jumbo
5.00% 1 point

10 Year Jumbo
5.375% 1 point

Rates are subject to change and are for illustrative purposes ONLY

California Gets $2.25B in Stimulus for High Speed Rail

WASHINGTON (Associated Press) — High-speed rail projects in California, Florida and Illinois are among the big winners of $8 billion in grants announced Thursday by the White House – the start of what some Democrats tout as a national rail-building program that could rival the interstate highways begun in the Eisenhower era.

President Barack Obama announced the awards during a town hall meeting in Tampa, Fla. – a follow-up to Wednesday's State of the Union address that focused on getting Americans back to work. Thirteen passenger rail corridors in 31 states will receive grants, which are funded by the economic recovery act enacted last year.

Obama said focusing on building 21st century infrastructure projects is an important element of the country's economic recovery.

"It creates jobs immediately and it lays the foundation for a vibrant economy in the future," Obama said.

Though the administration bills the program as "high-speed rail," most U.S. projects won't reach the speeds seen in Europe and Asia. California's trains would be by far the fastest, exceeding the 200 mph achieved by some trains overseas.

Source: Exerpted from the Associated Press via Huffington Post

Case-Shiller Data Show Strong California Growth, Weakness Elsewhere

Case-Shiller Data Show Strong California Growth, Weakness Elsewhere

The Case-Shiller report was mixed, with weakness in the Northeast and Midwest, but strong growth in California, especially the San Francisco Bay Area.

Overall, the 20-city composite index showed a November 2009 gain of 0.2% over October.